jeff@dciem.UUCP (Jeff Richardson) (08/24/84)
> If the government really feels it necessary that Canada should have > an aircraft industry ( for example ) then they should do it by > way of tax incentives and/or government loans to the private sector ( read > Canadian private sector ), and not by creating one more Crown Corporation > which is inherently going to be less efficient than its private sector > counterpart. > > J.B. Robinson While I agree that they're much better than creating a crown corporation, I don't think that tax incentives and government loans or grants are the way to solve the problem either. They're an artificially induced boost to one segment of the economy: a short-term, patch-like solution to a reoccurring long-term problem, because they treat the effects rather than the cause. Quite often they don't even benefit the people they were supposed to help. The problem is the poor economic climate, probably caused to a large extent by government over-regulation and high taxes to service a large deficit. (I know there are other causes too, but this is certainly a major factor and our governments are to blame for it.) If the money spent on incentive programmes was used to reduce the deficit and eventually reduce taxes, fewer businesses would fail because they'd be able to keep more of their profits and their customers would have more money to spend on them. Unfortunately, there are two problems with this: long-term solutions are politically bad because there is a good chance that their benefits wouldn't be felt in time for the next election, (especially since the deficit would have to be wiped out before taxes could be reduced) and the government has been handing out these freebies for song long that they're expected and counted on. Perhaps that's why none of the three major parties seem to have any plans for cutting down on these giveaways or reducing the deficit. In fact, the Liberal party seems to have a mental block when it comes to reducing the deficit. Lalonde uncovered some extra funds last month, but instead of using them to reduce the deficit, the Liberals are spending them and saying it's okay because it doesn't increase the deficit. (In my eyes, not reducing it when you have a chance to is just as bad as increasing it.) Of course, this could be a strategic move designed to leave no money for the new PC government. Then the PC's would have to increase the deficit to pay for their costly plans, which could be unpopular enough to get them thrown out. -- Jeff Richardson, DCIEM, Toronto (416) 635-2073 {linus,ihnp4,uw-beaver,floyd}!utcsrgv!dciem!jeff {allegra,ihnp4,linus,decvax}!utzoo!dciem!jeff